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Latin America Sees Late-Stage Rebound, But Early Stage Declines

Illustration of LatAm-labeled piggy bank on an inclined plane.

Venture funding to Latin America increased a bit in the third quarter of this year, as later-stage dealmaking returned to the region. However, reported seed and early-stage investment was down sharply, indicating greater wariness around backing less-established startups.

Altogether, investors put roughly $699 million to work across reported seed to late-stage financings in Q3, per Crunchbase data. That’s an 8% increase from Q2 2023 and a 46% drop from Q3 2022.

For perspective, we chart out total funding and round counts for the past 11 quarters below:

Probably the biggest takeaway from the chart above is how far things have come down from the 2021 peak. That year, startup investors put a record-setting $13.1 billion to work across all stages. By contrast, in the first three quarters of this year, just $1.9 billion has gone to the region.

For a sense of where the money is going, we take a look at Q3 investment across stages,  including prominent and active investors.

Table of contents

Late-stage pickup

Late-stage investment hit $365 million in Q3, a big rise from the prior quarter, when funding dipped to a multiyear low of $47 million.

For a bigger picture view, we chart out late-stage investment and round counts for the past five quarters below:

The latest quarterly totals got a boost from a few larger rounds. Among them was a $100 million financing for São Paulo-based online real estate platform Loft, which has raised over $800 million to date.

Another largish round went to Mottu, a Brazilian motorcycle rental startup focused on delivery providers, which secured $50 million in Series C financing in September. And Gringo, an app for drivers to manage licenses, car documentation and services, picked up $30 million in Series C capital.

All told, Latin American startups announced at least eight later-stage funding rounds in Q3, up from just two in Q2. The rebound was reflective of what we saw in global funding tallies for Q3, which showed sequential quarterly gains in late-stage activity.

Early and seed stage decline

At the same time, investors pared back funding at both seed and early stage in Q3.

Altogether, early-stage investment totaled $196 million, per Crunchbase data. That’s a decline of 50% from Q2 and 46% from the year-ago period.

For context, we compared early-stage funding and round counts for the past five quarters below:

Seed investment, meanwhile, dropped to $137 million, down 21% quarter over quarter and 59% year over year. We charted the past five quarters below:

The declines share similarities with global funding trends in Q3, which saw both seed and early stage investment fall sequentially. For future funding activity, it’s a bearish indicator both globally and for Latin America specifically. Fewer funded startups at seed and early stage means fewer companies with potential to deliver big exits ahead.

Still, we saw some sizable deals get done. One standout was Nomad, a fintech startup that offers accounts in the U.S. for Brazilians, which picked up $61 million in an August Series B led by Tiger Global Management.

Startup scene in flux

Broadly, the data points to a scene in flux, as investors reassess valuations and founders cut burn rates to better cope in an environment of scarcer capital.

Over the past several quarters, a host of prominent unicorns have carried out layoffs. They include Loft, Mexico City-based e-commerce platform Merama, Brazilian digital bank Neon, Bogotá-based delivery provider Rappi, and a lengthy list of others.

Exits via IPO have mostly stalled, and we’re not seeing much big-ticket M&A activity in Latin America’s startup scene, either.

The pickup in later-stage deals this past quarter offers some reassurance that investors will continue to back promising companies, albeit likely at valuations that are below the 2021 peak. However, it appears startup backers remain reticent to back sizable rounds at early and seed stages. We’ll stay tuned in coming quarters with the hopes that trends look rosier.


The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Oct. 3, 2023.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

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